Reward systems or management usually means the financial rewards and the non financial rewards which an organization gives to its employees in return for their labor. The term reward system, not only includes material rewards, but also non-material rewards. The reward system of a company is basically a system of pay and benefits used by the firm to reward workers not only in terms of monetary rewards. The components of a reward system consist of financial rewards such as basic and performance pay and employee benefits. Reward management also includes non-financial rewards such as recognition, promotion, praise, achievement responsibility and personal growth.
Standard Chartered Bank
The compensation package, which Standard Chartered Bank provides to their employees, is divided into two main categories. One package comprises of the sales personnel who have had the ability to meet their targets while the second is compensating the executives who are responsible for all the functions of the bank as a whole.
Get your grade
or your money back
using our Essay Writing Service!
Compensating the Sales Force: The dependability Standard Chartered Bank gives out to the customers as well as to its corporate is upon the ability of its existing sales force. These are the working individuals within the bank who take the right and active approach of getting the message out about the bank's valuable services and products.
The key to a successful sales compensation program can be achieved in three individual steps.
Measuring and tracking performance against set goals
Setting goals which are challenging yet realistic and achievable
Rewarding achievement with competitive and motivational compensation
One or more of the following components are comprised in sales compensation packages. They are,
Periodic incentives tied to short-term goals
Annual incentives tied to short-term sales activities
Perquisites to facilitates sales efforts
Executive Compensation: Standard Chartered Banks runs well in the industry due to many reasons. Therefore, the way the bank pays the top managers plays a huge role when it comes to motivation and the critical performance needed for the development and the effectiveness of the bank. The executive compensation package does not only include the base salary but also includes the following,
Deferred compensation arrangements
Long-term capital accumulation
Employment and charge of control agreements
Supplement benefits and perquisites
Special retirement and severance agreements
Reward & Recognition
Standard Charted Bank rewards their talented and high performing employees competitively. Regular reviews and continuous discussions have encouraged and helped the performance of the workforce, which provides feedback to the staff about how, well they have engaged in their assigned tasks. Never the less, the management links this to both financial and non-financial recognition.
In addition, to the above, the bank also provides a variety of incentives in the form of additional bonuses to the employees to motivate them for a higher performance. These include,
Best performer award
Spot award + Rs. 5000 as cash prize
Service quality awards
Year of excellence services (YES) award
Rewards & Benefits
Commercial Bank has continuously evaluated and reviewed its employee benefits to ensure that the benefits are competitive and is in hand in hand with its employee needs.
Salaries: Recognition of the individual performance is done by the annual review, which is subjected by the market competitive remuneration package.
Performance Bonus: This is the market competitive annual bonus, which is based on overall results and individual performance.
Share Save: Twenty percent discount on the market price is given to the employees of Commercial Bank when buying bank shares.
Incentive Schemes: Market competitive incentive schemes in specific business areas.
Banking products with preferential pricing
Private pension plans
Life & accident insurance
Medical check ups
Medical allowance including optical & dental treatments
Paid leave for marriage, maternity, sickness and vacations
Annual employee get-to-gathers
Development opportunities & career support
Link between Motivational Theory and Rewards
Factors determining rewards and their impact on employee motivation and endeavors influences any organization for a consideration of a more systematic and structured approach to acknowledge employees' efforts, which would in turn flourish high performance culture.
Always on Time
Marked to Standard
It is clear that there is direct and positive relationship between rewards and employee work motivation. It means that reward is directly proportion to employee work motivation. The change in rewards offered to employees necessarily changes the work motivation and performance of employees. Better the rewards, the higher the levels of motivation and greater levels of employee performance.
Never the less, it is should be made a point to communicate reward to employees in proper ceremony on time, so that they can be better motivated. The low-level employee has perceived the difference in salary, facilities, loans etc as de motivating factor.
Performance Evaluation Procedure
Yearly performance evaluation is critical. "Organization's are hard pressed to find good reasons why they can't dedicate an hour-long meeting once a year to ensure the mutual needs of the employee and organization are being met. Performance reviews help supervisors feel more honest in their relationships with their subordinates and feel better about themselves in their supervisorial roles." (McNamara)
Subordinates are assured clear understanding of what's expected from them, their own personal strengths and areas for development and a solid sense of their relationship with their supervisor.
After extensive research, the two procedures of both banks (Commercial Bank and Standard Chartered) have been stated below with references to their approach towards performance evaluation procedures.
Standard Chartered Bank
Avoiding performance issues ultimately decreases morale, decreases credibility of management, decreases the organization's overall effectiveness and wastes more of management's time to do what isn't being done properly. Thus Standard Chartered has conducted the following activities when establishing performance evaluation procedures.
Design a legally valid performance review process:
"The law requires that performance appraisals be: job-related and valid; based on a thorough analysis of the job; standardized for all employees; not biased against any race, color, sex, religion, or nationality; and performed by people who have adequate knowledge of the person or job" (King, 2008). Be sure to build in the process, a route for recourse if an employee feels he or she has been dealt with unfairly in an appraisal process e.g., that the employee can go to his or her supervisor's supervisor. The process should be clearly described in a personnel policy.
Design a standard form for performance appraisals:
Include the name of the employee, date the performance form was completed, dates specifying the time interval over which the employee is being evaluated, performance dimensions (include responsibilities from the job description, any assigned goals from the strategic plan, along with needed skills, such as communications, administration, etc.), a rating system (e.g., poor, average, good, excellent), space for commentary for each dimension, a final section for overall commentary, a final section for action plans to address improvements, and lines for signatures of the supervisor and employee. Signatures may either specify that the employee accepts the appraisal or has seen it, depending on wording on the form.
Schedule performance reviews:
Schedule the first performance review for six months after the employee starts employment, schedule another six months later, and then every year on the employee's anniversary date.
Initiate the performance review process and upcoming meeting:
Tell the employee that you're initiating a scheduled performance review. Remind them of what's involved in the process. Schedule a meeting about two weeks out.
Have the employee suggest any updates to the job description and provide written input to the appraisal:
Have them record their input concurrent to your recording theirs. Have them record their input on their own sheets (their feedback will be combined on the official form later on in the process). You and the employee can exchange each of your written feedback in the upcoming review meeting. (Note that, by now, employees should have received the job descriptions and goals well in advance of the review, i.e., a year before. The employee should also be familiar with the performance appraisal procedure and form.)
Document your input. Reference the job description and performance goals:
Be sure you are familiar with the job requirements and have sufficient contact with the employee to be making valid judgments. Don't comment on the employee's race, sex, religion, nationality, or a handicap or veteran status. Record major accomplishments, exhibited strengths and weaknesses according to the dimensions on the appraisal form, and suggest actions and training or development to improve performance. Use examples of behaviors wherever you can in the appraisal to help avoid counting on hearsay. Always address behaviors, not characteristics of personalities. The best way to follow this guideline is to consider what you saw with your eyes. Be sure to address only the behaviors of that employee, rather than behaviors of other employees.
Hold the performance appraisal meeting:
This Essay is
a Student's Work
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.Examples of our work
State the meeting's goals of exchanging feedback and coming to action plans, where necessary. In the meeting, let the employee speak first and give their input. Respond with your own input. Then discuss areas where you disagree. Attempt to avoid defensiveness; admitting how you feel at the present time, helps a great deal. Discuss behaviors, not personalities. Avoid final terms such as "always," "never," etc. Encourage participation and be supportive. Come to terms on actions, where possible. Try to end the meeting on a positive note.
Update and finalize the performance appraisal form:
Add agreed-to commentary on to the form. Note that if the employee wants to add attach written input to the final form, he or she should be able to do so. The supervisor signs the form and asks the employee to sign it. The form and its action plans are reviewed every few months, usually during one-on-one meetings with the employee.
Nothing should be surprising to the employee during the appraisal meeting:
Any performance issues should have been addressed as soon as those issues occurred. So nothing should be a surprise to the employee later on in the actual performance appraisal meeting. Surprises will appear to the employee as if the supervisor has not been doing his/her job and/or that the supervisor is not being fair. It is satisfactory to mention the issues in the meeting, but the employee should have heard about them beforehand.
Below, is the procedure in which commercial bank has designed its performance evaluation procedure.
Purpose of procedure
Provide an opportunity for the manager and his/her supervisor to set mutual objectives.
Provide a fair and effective means for making personnel decisions.
Recognize the importance of the manager's contribution to institutional success.
Provide a forum for open discussion of the manager's individual strengths and for the identification of areas where improvement is needed.
Improve the performance of the manager and, consequently, of the unit administered.
Enhance the credibility of the management process, including the process by which decisions are made, in the eyes of those affected by the process.
Scope of procedure
Apply for the evaluation of the entire company.
Contents of procedure:
Identify performance criteria:
The number of appraisal criteria for each position is from 3 - 10 criteria.
The standards set should be clear, easily understandable and in measurable terms
The appraisal criteria can be changed but must be the authority for approval and must be implemented for the relevant level before applying.
HR department and managers/ supervisor will set up weight of each criterion and must be approved directors.
Communicating performance criteria:
HR department should inform this procedure to all level of management and employees.
The employees should be informed and the standards should be clearly explained in order to help them understanding their roles and to know what exactly is expected from them.
Performance criteria should also be communicated to the appraisers or the evaluators and if required.
HR dept should prepare all materials, notes agreed tasks and records of performance, achievements, incidents, reports etc - anything pertaining to performance and achievement.
Inform the appraisee
To ensure the appraisee is informed of a suitable time and place and clarify purpose and type of appraisal.
Give the appraisee the chance to assemble data and relevant performance and achievement records and materials.
Review and measure
HR dept and managers / supervisors review the activities, tasks, objectives and achievements one by one, keeping to distinct separate items one by one.
Agree an action plan
An overall plan should be agreed with the appraisee, which should take account of the job responsibilities and review strengths and weaknesses.
The plan can be staged if necessary with short, medium and long term aspects, but importantly it must be agreed and realistic.
Comparing with desired criteria
The actual performance is compared with the desired or performance criteria.
The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance.
The result of the appraisal should be communicated and discussed with the employees.
The feedback should be given with a positive attitude as this can have an effect on the employees' future performance.
The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better.
The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus.
Managing Employee Separations, Downsizing and Outplacement
An organization's effort is to hire the best Human Resource talent available in the market. Sometimes, due to unavoidable reasons an organization has to part with its employees. Employee separations, downsizing and outplacement are some of the techniques followed by organizations for the above mentioned purpose. It is important to note here that the organization incurs significant costs both during the hiring and in the employee separation processes. The following costs could be mainly identified as Human Resource Replacement Costs,
Training and Development Cost
Both organizations which are Commercial Bank and Standard Chartered Bank follow a range of techniques for employee separation, downsizing and outplacement. These various techniques would be discussed in detail and analyzed under the following section.
Employee Separations, Downsizing and Outplacement
Employee separation could be defined as the process by which an organization or an individual ends his or her employment with that organization. This process could either be voluntary or involuntary. Where, voluntary separation is when an employee decides for personal or professional reasons to end the relationship with the employer and involuntary separation takes place when an employer terminates the relationship with an employee due to economic necessity or poor fit between the employee and the organization. However, it should be noted that an organization may have certain benefits of separation such as,
Reduce Labor Cost
Replace Employees with Poor Performance
Opportunity for Greater Diversity
Downsizing or laying - off could be a very harmful solution for any organization if it has not been done sparingly and with careful planning. However, if it is done properly it can act as a support for the organization and result in the previously mentioned advantages. It could be said that how downsized or laid - off employees are treated directly affects the morale and retention of valuable and well performing employees. Hence, downsizing or laying - off should not be done repeatedly without a thoughtful strategy as it can affect an organizations overall performance. The following steps should be taken when laying off or downsizing employees,
As much warning as possible should be given for the lay - offs
A private office should be used
The reasons should be clearly stated for the lay - offs
No time should be allowed for debates
Integrity of all parties should be maintained
Employee should not be rushed off site unless there is an issue with security
Everything should be stated in writing
Outplacement services should be provided away from the company
The service of the employee should be appreciated in an appropriate manner
"Outplacement is a term used to describe efforts made by a downsizing company to help former employees through the transition to new jobs and help them re-orientate to the job market. A consultancy firm usually provides the outplacement services which are paid for by the former employer and are achieved through practical advice and psychological support.
Outplacement is either delivered through individual one-on-one sessions or in a group format. Topics include career guidance, career evaluation, resume writing and interview preparation, developing networks, job search skills and targeting the job market. Individuals may be offered other services such as the use of an office and online tools." (Wikipedia Contributors 2010)
An exit interview is an interview which is conducted by an employer when an employee separates from the organization. These interviews are usually conducted by the Human Resource Staff or some skilled interviewer. The confidentiality of these interviews should be assured while open ended questions should be asked without any interrogation and also, the employee who separates from the organization should be informed of how the Human Resource Department would follow up the associated problem.
Selection Criteria for Redundancy at the Selected Organizations
It should be understood that the termination of an employee based on redundancy takes place only when the job which the employee performs is no longer required to be performed. Any organization or employer should be mindful about their obligations towards their employees before initiating the redundancy process. When considering the selection criteria for redundancy, that criteria should be objective, non - discriminatory, consistently and fairly applied.
Standard Chartered Bank
When considering the two selected banks, which are Standard Chartered Bank and Commercial Bank respectively each bank follows nearly similar selection criteria for redundancy. Standard Chartered Bank considers the following aspects when selecting employees for redundancy,
Skills, Qualifications and Aptitude (The bank believes this will help the organization to maintain a well balanced work force)
Standard of work performance of individual employees (The bank would measure this by considering the information which was gathered through performance appraisal)
Adaptability (The bank considers this as a very important aspect as it is an internationally operating bank and also since the bank carries out employee exchange programs the employees should be able to adopt to changes in working environment and also should be able to undertake different types of work in similar fields)
Commercial Bank would consider the following aspects when selecting an employee for redundancy. Some aspects of the following selection criteria would be given more emphasis.
The period of employment where the employees who were last recruited would be dismissed first, especially those who are on probation
The type of employee meaning if the employee is part time or a full time employee
The level of skills which the employee has, this would include experience in the relevant field, qualifications and training
The performance of individual employees
Commercial Bank, as it was mentioned previously follows similar selection criteria to that of Standard Chartered Bank when selecting employees for redundancy. However, it should be noted that even though Standard Chartered Bank would give more emphasis on aspects such as the individual performance and the level of skill of the employee, Commercial Bank has a tendency of giving more emphasis on areas such the time period which the employee has served the bank. Therefore, in case if the bank has decided to dismiss its employees the last recruited employees would be dismissed first where less consideration would be given to the performance and skill of the employee. This method, where the time period is concerned, could be criticized as the length of service is mostly unrelated to capacity of an employee or the conduct. When considering the selection criteria for redundancy of Standard Chartered Bank it could be identified as a very fair and a balanced selection criteria as the bank would even mostly disregard health conditions of employees such as disability and illnesses such as HIV/AIDS. It could also be identified that there may be a large influence of the culture within which Commercial Bank operates for its selection criteria.
Therefore, based on the above information it was possible to arrive at the conclusion that the selection criteria for redundancy at Standard Chartered Bank are better than that of Commercial Bank in many aspects. It is recommended, in order to develop better selection criteria for redundancy for Commercial Bank more emphasis should be given on aspects such as performance of individual employees and their skills and qualifications instead of the length of their service period for the bank. It should also be understood that younger staff would possibly posses knowledge which is more applicable for the current world.
Exit Strategies Followed by the Selected Organizations
Standard Chartered Bank
Standard Chartered Bank Employee Exit Leave Policy was revised at the end of year 2008. This policy is applicable for all employees, i.e. permanent or direct contract employees who have finished working for the bank voluntarily or involuntarily.
All permanent staff should notify their manager in writing that they intend to leave the employment of the bank, mentioning their desired last working day in accordance with their notice period, normally 1 month as stated in their contract of employment. The line manager should sign the resignation letter as well provide the employee confirmation in writing of either acceptance of resignation or the intention to terminate the contract of employment. The line managers are then expected to enter the details of the employee termination in to the database (ideally within 2 days) so that the payroll would stop in a timely manner.
Exiting employees should download and complete the exit checklist from the forms section of the bank. An exit interview should be completed with Human Resource Manager and the employee resignation letter should be given to the Human Resource Manager during this exit interview. The bank allows the staff extra time to finalize his/her affairs before cancelling the labor card and making the final payments. Upon exit all staff that has successfully completed the exit formalities are entitled to a service letter that simply states their dates of service together with the last position held.
If termination is a result of redundancy, the employee will receive a redundancy payment. From time to time the bank may be obliged to discontinue the employment of an employee immediately or on notice, in accordance with group policy, including the Disciplinary Procedure or Poor Performance Management procedure. In such instances, Human Resources will ensure that the matter is treated in accordance with the prevailing group and or local policy. In the event that an employee's services are terminated due to gross misconduct, then the termination will be with immediate effect and without notice.
At Commercial Bank when an employee decides to resign (voluntary separation) the organization, his/her Manager and the Human Resource Manager would discuss the resignation before the final decision is taken. If the employee still decides to leave the bank it is required for them to give a two week written notice period.
In the situation of involuntary separation, the bank would first dismiss part time and introductory employees, especially in case of a redundancy situation. Here, the employees who were dismissed would be compensated accordingly. The bank also offers voluntary retirement schemes. Here, the employees would be compensated according to banks policies.
At the point when an employee leaves the organization an exit interview will be conducted by the Human Resource Manager of the organization before the employees leaves the bank. Here, the bank is very concerned regarding the reason for the separation and would inquire the employee's impression regarding the bank. The bank also ensures total confidentiality of this information gathered at the exit interviews.
At the point of termination of employment Commercial Bank expects all property belonging to the bank to be returned. Commercial Bank follows a verification policy where the bank provides no information regarding former employees but instead it would verify the accuracy or inaccuracy of information provided by a third party regarding an employee's position and dates of employment.
When analyzing the exit strategies followed by Standard Chartered Bank and Commercial Bank it is clear that the strategies followed by both organization are not perfect. Both organizations do not provide outplacement services to their employees. This could be seen as a major drawback of both organizations.
However, Standard Chartered Bank provides their employees a service letter which states particular such as the last position held and their dates of service whereas Commercial Bank would not provide any such details unless a verification is required regarding a former employee by a third party. When considering the above, the method followed by Standard Chartered Bank could be said to be better as it may be helpful in the process of finding new employment for the resigned employee.
Beyond this, the tactics followed by Commercial Bank in a situation of voluntary separation could be said to be better as the bank conducts a particular meeting before the employee makes his/her decision final regarding resigning the organization. This is a better technique as this would help the bank to retain maybe very valuable employees by considering their feedback regarding the organization.
Finally, it was possible to arrive at the conclusion that even though both banks, i.e. Standard Chartered Bank and Commercial Bank have drawbacks in their Employee Exit Strategies both banks have certain positive points as well. However, it could be recommended that both banks could improve their Employee Exit Strategies through the introduction of outplacement services. Commercial Bank could provide written evidence to former employees by giving description regarding the position held by the employee and also the service period.